The ex-ante tariff controls imposed on market dominant telecommunications operators will not apply to Cable TV, the Office of the Telecommunications Authority says.

The move means the company will not be required to apply to the authority for approval of tariffs for telephony service or cable modem access line service before they are implemented.

The authority feels Cable TV is not dominant in the market for telephony service or in the market for wholesale broadband conveyance services.

Pursuant to General Condition 44 of the Fixed Telecommunications Network Services licence of Cable TV, the authority will direct that none of the provisions of GC20(4), GC21, GC22 and GC23 of the licence will apply to the company. These licence conditions are related to ex-ante tariff control.

Industry consulted, various factors considered

Before arriving at the decision, the authority consulted the industry and considered a number of factors, including market share, price power, entry barriers, product differentiation and other constraint factors.

The authority concluded that Cable TV is unlikely to be able to act without significant competitive restraint from its competitors and customers.

Cable TV has not yet launched the telephony service. Its market share in the wholesale broadband conveyance service market is less than 25%, and the service is at present only available to its affiliated Internet Service Provider, i-Cable Webserve.

Cable TV unlikely to have significant market power

Faced with a large number of established competitors in the market, Cable TV is unlikely to have significant market power after its market entry, the authority said.

Noting there may be concern Cable TV's presence in the subscription TV market may provide it with certain advantages in the telephony market, the authority said the telephony service is also occupied by PCCW-HKT Telephone with a large market share, as well as by other network facility competitors.

This advantage can therefore facilitate Cable TV's market entry, but is not likely to provide the company with a significant competitive edge over its competitors, the authority said.